JobKeeper Payment for sole traders and other entities

Last Updated: 29 May 2020

Sole traders and other entities may be eligible to receive the JobKeeper Payment if their turnover has reduced due to coronavirus. Following registration by the eligible business, the Government will provide $1500 per fortnight per eligible employee until 27 September 2020.

JobKeeper updates from the ATO

JobKeeper is paid to employers. The ATO does not make payments directly to employees.

A monthly business declaration must be made by the 14th day of each month, starting in June, to receive reimbursements for payments made in the previous month.

The JobKeeper Payment is a scheme to support businesses significantly affected by the coronavirus to help keep more Australians in jobs. The JobKeeper Payment is administered by the Australian Taxation Office (ATO).

Sole traders and some other entities (such as partnerships, trusts or companies) may be entitled to the JobKeeper Payment scheme under the business participation entitlement. However, not-for-profit organisations are not included.

A limit applies of one $1500 JobKeeper payment per fortnight for one eligible business participant. If your entity also has employees, you may also be able to claim additional JobKeeper payments of $1500 per fortnight per eligible employee.

The entity, not the eligible business participant, receives the JobKeeper payment. The exception is a sole trader, who is both the business entity and an eligible business participant, and so receives the JobKeeper payment themselves.

a 2018–19 income tax return showing that it had an amount included in its assessable income in relation to it carrying on a business, or

an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that it made a taxable, GST-free or input-taxed sale

The ATO have the discretion to give further time, but only in limited circumstances, including if you:

did not have a requirement to lodge your 2018-2019 return until after 12 March 2020

have deferred your lodgment under an extension of lodgment date we initiated

Ineligible entities

An entity is not eligible for the JobKeeper payment for an eligible business participant if:

the Major Bank Levy was imposed on the entity or a member of its consolidated group for any quarter before 1 March 2020

the entity is a not-for-profit organisation

the entity is an Australian government agency (within the meaning of the Income Tax Assessment Act 1997)

the entity is a local governing body

the entity is wholly owned by an Australian government agency or local governing body

the entity is a sovereign entity

if the entity is a company in liquidation

if the entity is an individual who has entered bankruptcy

Timing

The subsidy started on 30 March 2020, with the first payments to be received by sole traders and other entities in the first week of May.

The time to enrol for the initial JobKeeper periods has been extended, from 30 April 2020 until 31 May 2020.

How to apply

When you have worked out that your business is an eligible entity and your individual non-employee is an eligible business participant, you need to enrol. Your entity needs to enrol by 31 May 2020 in respect of claims for the JobKeeper fortnights ending in April and May 2020. Your entity will also need to provide details of the eligible business participant to us. Then, within 7 days your entity must inform the eligible business participant that it has done so (unless you're a sole trader).

The eligible business participant needs to complete a nomination notice.

If you're a sole trader, you can nominate yourself as the eligible business participant during the online enrolment process in the Business Portal or in ATO online services using myGov.

What to do if you're receiving the JobSeeker Payment

If you're receiving a Services Australia income support payment, like the JobSeeker Payment, and your employer has notified you that they are receiving the JobKeeper Payment, you must report that income to Services Australia.

You may also need to cancel your JobSeeker Payment. If you do not report the income or cancel your JobSeeker Payment, you may incur a debt that you will be required to pay back.

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